Clean Energy Cess Doubled to ₹ 100 per Tonne to Mop up ₹ 17,000 Crores in NCEF

India’s Action-Oriented Policies to Bring Rapid Development to People While Purposefully Addressing Climate Change

 The Economic Survey 2014-15 presented in the Parliament today says that India has made considerable progress in tackling climate change issues. The year 2015 is going to witness new agreements on climate change and sustainable development. India has been following action-oriented policies to bring rapid development to its people while purposefully addressing climate change. India has been one of the foremost advocates of long-terms global cooperation in combating climate change in accordance with the principles and provisions of the UN Framework Convention on Climate Change (UNFCCC).

 India launched its National Action Plan on Climate Change way back in 2008 and is currently revisiting National Missions in the light of new scientific information and technological advances.

 India’s total renewable power installed capacity as 31 December 2014 has reached 33.8 GegaWatts(GW). Wind energy continues to dominate this share accounting for 66 per cent of installed capacity followed by biomass, small hydro power and solar power. India’s National solar Mission is being scaled up five-fold to 1,00,000 megawatts by 2022 In the next five years proposals are likely to generate business opportunities of the order of 160 billion US Dollars in the renewable energy sector. It offers very good opportunity for businesses to set and scale up industry, leapfrog technologies and create volumes. Some of India’s major immediate plans on renewable energy include scaling up cumulative installed capacity to 170 gegawatts (GW) and establishing a National University for Renewable Energy.

 India introduced the clean energy cess on coal in 2010 which very few countries have in the world. This has been doubled to ₹ 100 per tonne in 2014. The total collection so far under the National Clean Energy Fund NCEF has crossed ₹ 17,000 crores and till September, 2014, 46 clean energy projects worth ₹ 16,511.43 crores have been recommended for funding out of this fund.

 Efforts are also under way by the government to build India’s institutional capacity for mobilizing climate change finance. India has set a National Adaptation Fund with an initial corpus of ₹ 100 crores in 2014 to support adaptation actions to combat the challenges of climate change in sectors like agriculture, water and forestry.

 The Survey says the global agreement on climate change expected by December, 2015 under the UNFCCC applicable to all countries must be ambitious, comprehensive, equitable and balanced taking into account the huge development needs of developing countries. It should address the genuine requirements of developing countries like India by providing them equitable carbon and development space to achieve sustainable development and eradicate poverty. Simultaneously, the multilateral Green Climate Fund (GCF) under the UNFCCC has made progress and is now ready for business with around US$ 10 billion pledged to it by the contributing Parties. At the country level, institutional mechanism required to access the GCF resources are being set up.

 Prime Minister Shri Narendra Modi in his address in UN General Assembly in September, 2014 said “We should be honest in shouldering our responsibilities in meeting the challenges. The world community has agreed on a beautiful balance of collective action - common but differentiated responsibilities. This should form the basis of continued action.” India’s stand in the ongoing negotiations has been guided by the principle of Equity and Common but Differentiated Responsibilities (CBDR). India believes that the climate change agreement of 2015 should take into consideration a whole gamut of issues including adaptation, finance, technology development and transfer, capacity building, transparency of action and support in a balanced manner and loss and damage in addition to mitigation.

 The latest scientific findings has estimated that out of the carbon budget(CO2 emissions) of 2,900 Giga tonnes (Gt), only 1,000 Gt remains to be used between now and 2100 in order to limit the temperature increase to 2°C. Most of the current and cumulative carbon budget has been used by the developed countries. The World Resources Institute estimates that if emissions continue unabated, the remaining budget will last only 30 more years. The key issue therefore for designing emission reduction commitment is how the remaining carbon budget needs to be allocated with a fair burden sharing mechanism. India’s contribution to cumulative global CO2 (1850-2011) was a meagre 3 per cent as against 21 per cent by USA and 18 per cent by the EU.

 The Economic Survey 2014-15 focusses on sustainable development goals for India saying that the challenges for India are manifold. India is at the threshold of an urban flare-up. With more than a billion population, India has to address the problems associated with increasing urbanization, tackle the problem of eradicating poverty, providing energy access to all and address other developmental priorities. It says that hidden in these challenges are great opportunities. Unlike many countries, India has a young population and therefore can reap the fruits of demographic dividend. With more than half of the India of 2030 yet to be built, we have an opportunity to avoid excessive dependence on fossil fuel based energy systems and carbon lock-ins that many industrialized countries face today. A conscious policy framework which takes into account both developmental needs and environmental considerations could help turn the challenges into opportunities, the Economic Survey suggests.

 India’s development plans lay a balanced emphasis on economic development and the environment. The country has witnessed the introduction of landmark environmental measures for conservation of rivers, improvement of urban air quality, enhanced forestation, significant increase in installed capacity of renewable energy technologies, shift towards public transport and enhancing rural and urban infrastructure. Recent key initiatives include the Swachh Bharat Mission, Clean Ganga Plan, scaling up of the National Solar Mission fivefold from 20,000 MW to 1,00,000 MW with an additional investment requirement of US $ 100 billion, development of 100 smart cities with integrated policies for sustainable development and preparations for developing a National Air Quality Index and a National Air Quality Scheme.

National Solar Mission scaling to greatly expand renewable capacity, spurring investment, industry growth and climate-resilient energy planning. India is dramatically scaling up the National Solar Mission to expand renewable capacity as a central policy instrument to attract investment, scale technologies and prevent carbon lock-in, supported by fiscal measures including a doubled clean energy cess funding the National Clean Energy Fund and a National Adaptation Fund; institutional steps are being taken to mobilize climate finance and to secure an equitable global climate agreement that preserves developing countries' carbon and development space.